Since the value of the multiplier is always at least 1, which of the following is correct?
a. The size of the vertical shift in the aggregate expenditure line is always equal to the change in GDP
b. The size of the vertical shift in the aggregate expenditure line is always less than the change in GDP
c. The size of the vertical shift in the aggregate expenditure line is always greater than the change in GDP
d. The size of the vertical shift in the aggregate expenditure line is always equal to or smaller than the change in GDP
e. The MPC is always bigger than 1
D
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Which of the following CORRECTLY characterize principals and agents in important examples of the principal-agent problem?
A) In the doctor/patient relationship, the patient is the principal and the doctor is the agent. B) In the lawyer/client relationship, the client is the principal and the lawyer is the agent. C) Both of the above answers are correct. D) Neither of the above answers is correct.
Countries with
A) strong investment opportunities should invest little at home and channel their savings into more productive investment activity abroad. B) strong investment opportunities should invest more at home and less abroad. C) weak investment opportunities should invest more at home. D) weak investment opportunities should invest little abroad. E) countries with productive investment should invest exclusively at home.